Correlation Between Ensysce Biosciences and BrightSpring Health

Can any of the company-specific risk be diversified away by investing in both Ensysce Biosciences and BrightSpring Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ensysce Biosciences and BrightSpring Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ensysce Biosciences and BrightSpring Health Services,, you can compare the effects of market volatilities on Ensysce Biosciences and BrightSpring Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ensysce Biosciences with a short position of BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensysce Biosciences and BrightSpring Health.

Diversification Opportunities for Ensysce Biosciences and BrightSpring Health

0.0

Correlation Coefficient

Ensysce Biosciences  BrightSpring Health

Pay attention - limited upside

The 3 months correlation between Ensysce and BrightSpring is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and Ensysce Biosciences is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ensysce Biosciences are associated (or correlated) with BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and BrightSpring Health go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and BrightSpring Health

If you would invest  7,022  in BrightSpring Health Services, on November 29, 2024 and sell it today you would lose (51.00) from holding BrightSpring Health Services, or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ensysce Biosciences  vs.  BrightSpring Health Services,

Ensysce Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ensysce Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Ensysce Biosciences is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BrightSpring Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days BrightSpring Health Services, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BrightSpring Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ensysce Biosciences and BrightSpring Health

The main advantage of trading using opposite Ensysce Biosciences and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensysce Biosciences position performs unexpectedly, BrightSpring Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BrightSpring Health will offset losses from the drop in BrightSpring Health's long position.

The idea behind Ensysce Biosciences and BrightSpring Health Services, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..